Automobile depreciation not calculating

[rysing]

I placed a 50,000 auto in service in 2022.  Approximately 75% business use = business basis of 40K.  5 year life.  200DB/HY  2022 Section 179 was 14,000  Depreciable basis of 24K 

No depreciation in 2022 

No Depreciation in 2023 

The 2023 Asset life history shows no depreciation in 2022 -  2027 with depreciation of 5K starting in 2028 and 2029.  Only 10K in total.  AMT Depreciation is 5K per year starting in 2028 through 2032 totaling the basis of 24K.

What was done wrong?

Thanks

[KrisD15]

Are you entering vehicle expenses each year?

If you enter the vehicle as a business asset the first year (2022) you need to enter expenses each year afterwards.

From the business tab, select START or UPDATE for the Schedule C

Select EDIT for the business listed

Scroll down to 

Business Expenses

Below that select START or UPDATE for "Business Vehicle Expenses"

If the vehicle is listed, select EDIT and continue through the interview

Here is where the cost is listed 

Here is where you enter Business Miles and Personal Miles

The program determines the business use by the number of miles you enter. If the use drops below 50%, you won't get depreciation.

If the vehicle is not listed, you may have tried to enter it under Business Assets which wouldn't be correct.

When you enter the vehicle, you enter the total cost and the program determines the portion to depreciate based on business use which is determined by the portion of business miles to total and personal miles. 

[rysing]

Thanks,  followed your comments but still not calculating any depreciation....would the 5% owner question (yes) impact depreciation?  

Any other questions that would override the MACRS election?  Anything I could have done in 2022, since no depreciation (only 179 deduction) in 2022 either, that was carried over to 2023?

[rysing]

No amount on Fm 4562 Section A line26 col h.....where is that calculated from? 

[rysing]

I am entering vehicle expenses each year on the Car and Truck worksheet. 

I looked at 2022 TurboTax return and the Section 179 and Depreciation are at the maximum amount of 14,700 (19200 * 76% business Use).  However in 2022, the Asset Life History shows Depreciation not starting until 2028?  Why is that?  What election did I make?

Thanks

Bob

[PatriciaV]

On the Car & Truck Wks for this vehicle, look under Part VIII Line 56.  If the "auto limitations" box on line 56 is checked YES, the deduction will be limited based on the annual statutory dollar limit and the business use percentage. The current year limitation is shown for your information on Line 35.

If you took Section 179 or Bonus Depreciation last year, it's possible you reached the depreciation limit. That's why you had no regular depreciation. And why you have none this year.

@rysing 

[rysing]

Thank you @PatriciaV,

My Depr and Sect 179 was limited last year, and my basis was lowered by the total Sect 179 claimed.  Why would that eliminate the current year depreciation, subject again to the luxury car limit of 18,000?  The Asset Life History calculated last year did not have any amount through 2027 and then had deductions in 2028 through 2030.

@rysing  

[PatriciaV]

If you reached the depreciation limit, you won't have additional depreciation expense for the next five years. That's why the Asset Life History has no expense until 2028.

[rysing]

Thanks @PatriciaV   Agree conceptually, but only 5 year property so should be fully depreciated after 5 years, not begin depreciation.  Year 1 was 14K section 179 so still had 25k to depreciate.   Thinking an election was not correct in 2022 turbo tax since asset history didn't start depreciating until '28.   

Best

Bob